Amidst recent market speculations, Dayang Enterprises Sdn Bhd (Dayang) has finally been awarded Petronas Carigali Sdn Bhd's (Petronas) hook up and commissioning (HUC) job pushing the group's order book in excess of the RM1 billion mark.

Dayang, a wholly owned subsidiary of Dayang Enterprises Holdings Bhd is principally involved in the provision of maintenance services for topside structures, pipes and valves, electrical and instrumentation installation, fabrication operations as well as HUC services for the oil and gas industry.

According to ECM Libra Capital Sdn Bhd (ECM Libra), the contract was awarded for the provision of HUC of Petronas's facilities from 2010 to 2012. Under this contract, Dayang received three work orders at an estimated value of RM150.87 million scheduled for completion within six to twelve months.

The contract included the HUC of Resak Host Tie-in for Tangga Barat Development Project, Duyong Revisit IV Project

and the provision of interim topside major maintenance services for Petronas.

In terms of margin expectations, the research firm viewed that 15 per cent to 20 per cent at earnings before interest and tax (EBIT) level was reasonable to expect as it would be similar to other HUC jobs the company had undertaken previously.

ECM Libra maintained its estimates at this juncture as the RM151 million made up part of the contract replenishment assumptions for the financial year 2010 and 2011 of RM250 million and RM300 million respectively.

The research firm further stated that the recent share price weakness would be a good opportunity to buy into Dayang. It pegged its target price at a fair value of RM2.80 per share, based on a 15 times price earnings of financial year estimates.

The group is expected to release its first quarter results tomorrow.